3 Common errors to look for in your county tax assessment
Do you think you’re paying too much in property taxes on your home? If so then keep reading, because I want to
share with you some of the most common errors I’ve found in my appraisal work that can result in your property taxes being higher than they should be.
There’s a set process for appealing your property taxes depending on where your live so you should find out what you need to do by contacting the county assessors office. If you follow their procedures, and provide solid evidence that your home is over assessed, then the chances of getting your taxes lowered will be greater. Today we’re going to look at 3 common errors to look for in your county tax assessment that may help you lower your taxes.
Land value
I have ran across this situation numerous times in the last month so I want to make you aware of it. During the typical course of the appraisal process the value of the land that a home is located on is estimated. This is done, as you would expect, by locating recent and similar land sales and using them to estimate the subjects land value . I have found there to be significant errors in what the county has the land assessed at and what I come up with.
The total county tax assessment consists of the addition of the land value and the improvement value. One explanation for the error in land value could be that the county failed to reassess the land with current land comparables. During downturns in the real estate market like we’ve had over the last several years, much of the value lost is attributable to the land. This is sometimes caused when there is a reduced demand for vacant land as a result of less new construction activity.
If you can provide evidence that the land value is less than what they have then you may be able to get the assessment lowered as well as your taxes. In my area of Birmingham, AL an acceptable form of evidence to lower the assessment could be either an appraisal or MLS printouts showing recent sales. The land sales used to support your claim should be similar to your property and not lower just because they are inferior.
Living area
County records is notorious for having bad information when it comes to the living area of your home. The only time I have confidence that county records is accurate is for one story homes built on a slab or crawlspace. Homes that are 1.5 or 2 story are usually not as accurate, and then if they have basements with finished area the errors can be even greater.
There are a couple of things you can do to verify if the county information is correct. My first suggestion would be to check any recent appraisals you may have. There should be a floor plan sketch within the report that shows the gross living area, however if there is no sketch it should at least have the amount shown in another area of the report. You’ll want to make sure to consider all levels including the basement. If you do not have a recent appraisal you can have your house measured as part of a full appraisal or just to get the square footage.
Assessment vs. recent sales price
This is one area that many people fail to consider. If you find discrepancies between what the assessed value currently is, and what you recently purchased the home for, this could also be a way for you to reduce your taxes. We’re not talking about the situation where you have purchased a home out of foreclosure because the property appraiser does not consider foreclosure sales to be valid market sales. If you bought a foreclosure home for less than what the county has it assessed for then they most likely will not change the assessment, however if the sale was an “arm’s length” transaction that is lower than the assessment, then you have a good chance of having this sale taken into consideration in order to get your taxes lowered.
Conclusion
There are numerous things that you can do to get your property taxes lowered, three of which I have mentioned above. If you have any questions about what you can do to help lower your taxes feel free to contact me, or if you have a comment you would like to make you can do that at the end of the post. Once again, thanks for taking the time to read my blog.
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Great tips Tom. I recently helped a friend with the appeal process in Los Angeles.
Thanks!
Thanks Jason. I think this is an area that too many people just don’t worry about but being an appraiser I see a lot of properties that are over assessed. I’m glad you were able to help your friend.
Good read, Tom. Having “been there, done that” I too find that counties make mistakes based on incomplete or erroneous information. Hopefully, the Board of Equalization will respectfully consider solid relevant evidence. What’s maddening is when you see a residential area of town where there are hardly any arms-length sales, only a glut of foreclosures over the previous year. You & I both know those properties’ values remain depressed yet the county won’t budge downward.
Good points Dan. I understand in some areas that foreclosures are not the norm and don’t really reflect true value, but in the areas you describe even “normal” sales are influenced by foreclosures so it would make sense to include these in assessment reconsiderations. Thanks for sharing your thoughts.
Those are great tips for errors to look for on your taxes. Thank you.
Thanks Gary. I think that over assessment can potentially be an issue in all areas of the country.
Interesting. In the Sacramento are the Assessor has a land value, but tax payers are not allowed to contest just the land value. Owners can only attest the total assessed value. The land value is very often simply a percentage of the total value of the property, and it is really off-base in many cases.
I agree Ryan. I recently had a situation where I valued the land at $25,000-$30,000 but the county had it at $65,000. That can really over assess the property and result in higher taxes.
Great info everyone. I make an effort to market my appeal efforts towards vacant land properties for that very reason. Because, in nj, we have to appeal the total. Cant breakdown land. We also have Chapter 123, which applies a ratio to the current assessments. Most folks dont understand
Thanks for sharing Matt. Sounds like you are helping homeowners understand details of the appeal process.